Scott Daniels, co-founder and director of Plus Group, believes paraplanning is at an inflection point, which will be driven by artificial intelligence and see increased consolidation amongst outsourced paraplanner firms.
The Liverpool headquartered outsourced paraplanning firm, which began its journey offering services to St James’s Place advisers, has been on an expansion drive, offering its paraplanning services to other advice companies and networks as well as setting up a consultancy business for financial advice businesses, a social media content and delivery service for advisers, and expanding its reach into the international market.
The international expansion of the firm has seen it open an office in Dubai, with eyes on work in Hong Kong, Singapore and Australia.
“I’ve just come back from four months in Dubai, launching the office in January and bringing on around 40 clients,” Daniels says.
The Dubai office as well as serving financial advice companies in the country, is a convenient half way house between the UK and the far east, where Daniels believes there is plenty of opportunity for outsourced paraplanning.
“The UK is a tightly regulated financial services market and many other regimes see it as the one to emulate. They have different rules and different cultures, which have to be learned and adhered to, but because our paraplanners have experience of working to FCA regulations, this can give them an advantage when working for financial advice firms in these jurisdictions,” Daniels explains.
“Once we are up and running with the regulations and ways of working within these jurisdictions, we give the financial advice firms the confidence to know that they have a highly experienced technical team working alongside them. It frees up their advisers’ time to focus on the clients’ needs and goals, while giving them a better structure, reduced risks and reduced costs within the business.”
Daniels sees Middle East jurisdictions looking to diversify into becoming financial services hubs, which will offer considerable potential for outsourced paraplanners. As well as Dubai, Daniels sees opportunities in Abu Dhabi, Qatar and Saudi Arabia. “These jurisdictions want good advice firms on the ground, while the firms want ways to maximise their efficiencies and bring on more business.”
Plus Group celebrated its 10th anniversary in 2023, during which year it also launched two new services for financial advice firms.
Adeptli, is a business consultancy for financial advice firms, whereby the firm works with the advice business to assess its organisation and operation structure, its technology use and compliance, as well as HNW and complex case support.
“Building efficient systems has been instrumental in the success of our own business – including Fluid, our revolutionary paraplanning case management solution,” says Daniels. “This, combined with our 10 years’ experience of working with advice firms means we can go into a business and help them streamline their processes, make better use of the systems and software that they have, and bring in our expertise to help the firm operate more efficiently.”
Sisoma is a social media platform that help advice firms create and disseminate content via social media. “Advice firms often haven’t got the resource or the knowledge to develop a successful social media campaign. We can generate brand awareness and establish a good online reputation, as well as help them secure lead generation in their area,” Daniels explains.
A key development which Daniels sees as creating an inflection point in the paraplanning space, is artificial intelligence. “AI is going to change the world, just like the internet has. For paraplanning, we see it creating massive efficiencies. We’re working with an AI company now 0n how we can make best use of it both within our business and as part of the services we offer advice firms.
“We see AI taking on the run-of-the-mill paraplanning and paraplanners moving to focus on the more complex cases where you need technical expertise and human interaction with the clients as well as becoming specialists in certain areas of advice. We don’t see it taking away true paraplanners’ jobs.
However, what this may mean is that paraplanners will need to be level 4 qualified as a minimum and authorised by the FCA, Daniels says. “I don’t see that as a bad thing. We have to start questioning; for example, where you have an authorised adviser and an unqualified paraplanner doing the technical work, how does that sit under Consumer Duty and ensuring against the prospect of foreseeable harm?”
He says he is also seeing an increase in consolidation in the outsourced paraplanning market. “We are seeing one person and small outsourced businesses not wanting to have to take on the paraplanning, regulation and running a business any more. They are looking to join larger firms, where they can benefit from having larger team around them, access to systems and software which they don’t have to maintain and also things like marketing resources.
“We’ve seen this happen with adviser firms over the years and I think now we will see consolidation beginning to become more common in the outsourced paraplanning market.”
In terms of continuing to diversify Plus Group’s scope and geographical area, Daniels says to date the expansion has been self funded. “But we see opportunities that may be better served by a merger, or acquisition or joint venture. We are really looking at how we move forward from here.”
